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3 Times It's Smart to Take Social Security Early

By Kailey Hagen - Dec 9, 2019 at 9:01AM

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Getting the most from Social Security usually means delaying benefits, but not if any of these scenarios apply to you.

The most popular age to begin Social Security is still 62 -- the year you're eligible. But that's often not the best year to begin if you hope to maximize your lifetime benefits. Every month you claim Social Security before you reach your full retirement age (FRA) -- 66 or 67, depending on your birth year -- permanently reduces the size of your benefit checks. 

If you begin at 62, you'll only get 70% of your scheduled benefit per check if your FRA is 67, or 75% if your FRA is 66. Over 20 or 30 years, that difference can cost you hundreds of thousands of dollars. On the other hand, those who choose to delay benefits past their FRA will see their checks rise every month until age 70, when they get the maximum of 124% of their scheduled benefit per check for a FRA of 67, or 132% for a FRA of 66.

Social Security cards with a $100 bill

Image source: Getty Images.

Delaying is often the smarter move, but there are a few exceptions. If any of the following three scenarios apply to you, you're better off claiming Social Security before your FRA, and maybe even right away, at 62.

1. You don't expect to live much longer

The whole idea of delaying Social Security is so that you can increase the size of each individual check. It means you'll get fewer checks overall, but if you expect to live to your mid- to late-80s or beyond, you'll probably get more money by delaying. However, if you have a terminal illness or unhealthy habits you believe may shorten your life expectancy, waiting might just cost you money.

Consider this: A man who is entitled to a $1,500 benefit at his FRA of 67 would only get $1,050 per month if he began claiming at 62. If that person lives until 80, he'd get $252,000 in benefits if he waited until his FRA to begin claiming, compared to just $239,400 if he'd started right away at 62. But if he only lived until 75, he'd get more money starting at 62 than waiting until his FRA -- $176,400 compared to $162,000. 

You can't know exactly how long you're going to live, but keep your best guess in mind when deciding when to start collecting Social Security, and if you find out you have a terminal illness, start benefits right away. 

2. You earn less than your spouse

Couples can get the most out of Social Security by coordinating their starting ages. If both partners earn about the same amount, they're both better off delaying benefits as long as they're able to. But that's not always true when one partner earns significantly more than the other.

The higher-earning spouse may prefer to delay benefits until 70, when they are entitled to the largest possible benefit. If they are unable to do so without jeopardizing their financial security in the short term, the lower-earning spouse can step in and begin claiming benefits early. This provides some supplementary income that enables the higher-earning spouse to continue delaying benefits until they qualify for larger checks, which will help pay even more of the couple's bills in retirement.

When the higher-earning spouse finally applies for Social Security, the Social Security Administration will automatically switch the lower-earning spouse to a spousal benefit if it is higher than the benefit they were entitled to based on their own work record. The spousal benefit will be half of the higher-earning spouse's Social Security benefit at their FRA, and this amount does not change even if the higher-earning spouse starts Social Security early or delays it, although it can be lower if the lower-earning spouse hasn't yet reached their own FRA.

3. You need it to get by

Social Security can be the lifeline that helps keep you out of debt if you weren't able to save enough for retirement when you were younger. It makes sense to start early if it's the only way you can afford to keep a roof over your head and food on your table, even though it means giving up larger checks later on. 

Before you decide to claim Social Security early due to financial hardship, consider all of your other options first. You might qualify for Social Security disability benefits or other government benefits that can provide additional income. You might also be able to make ends meet by downsizing or cutting back your expenses. These options are worth considering if you'd like to hold out for larger Social Security checks later.

When you begin collecting Social Security is a personal decision, and there really isn't a wrong answer. You'll get some money whichever way you go about it. But if you want the largest checks possible, consider delaying your benefits unless one of the three above scenarios applies to you.

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